Marketing control

Prof. PUTTU GURU PRASAD FACULTY MEMBER INC GUNTUR pgp4149@gmail.com

Two aspects

Milan Kundera, the famous Czech novelist, playwright, and poet, said, business has only two functions marketing and innovation The two aspects which are very important for any organizational function are: strategy and

execution.

Marketing control deals with execution of marketing strategies and checking whether the

Types of Marketing Control

Strategic

control Annual plan control Profitability control Efficiency and effectiveness control

Strategic controls

Schreyogg and Steinmann define strategic control as the critical evaluation of plans, activities, and results , thereby providing information for future action According to John F. Preble , strategic control has four components: premise control, implementation control, strategic surveillance, and special alert control

Annual plan control

Projected values of sales volume, market share, and profits are some of the typical performance standards under this type of control. Two important techniques used for tracking results and comparing them with the standards are variance analysis and marketing expenses-tosales analysis

Profitability control

The strategic profit model is a useful technique for profitability control, i.e. the financial performance in terms of profits and return on investment. The two other tools are the segment margin report that generates separate income statement from each customer segment or product line, and the activity based costing (ABC) system that is used to analyze the whole marketing efforts by analyzing the marketing function based on different activities

Efficiency and effectiveness control

Customer satisfaction is one measure of effectiveness in selling. Conducting customer satisfaction surveys, tracking customer attitudes, and analyzing customer feedback are some of the activates that help to assess the marketing effectiveness. Efficiency control is used to increase productivity in marketing activities. It focus on the sales volume, sales generated by salesperson, number of accounts handled by each sales person, etc.

Marketing Audit

External and internal audits Effective marketing audit Conducting a marketing audit

Sales control

Sales budgets Sales quotas Sales and cost analysis Sales reporting Reports from the sales force Reports from the sales management Sales force compensation and incentive system Sales force management audit

Credit control

Receivables management Credit rating Credit policy Credit period Discounts and rebates

Distribution control

Channel integration Vertical marketing systems Horizontal marketing systems Channel management Evaluation of channel performance Evaluation of micro-level performance Channel conflict management

Distribution control

The distribution function ensures that the products of the organization reach the markets. The distribution channel consists of the manufactures, intermediaries and end users. The distribution channels can be controlled in different ways One method is through channel integration and another is through channel management. Evaluating the channel performance is another control mechanism in the distribution function

Channel integration

It involves cooperation from the various channel members. These include maintaining minimum inventory levels, improving mutual relation ships among channel members, reducing transaction costs, helping organization to manage the skill and resources better, and enabling organizations to develop a competitive advantage

Vertical Marketing Systems There are two ways in which channel

integration can be achieved. A vertical marketing system is a common model of channel integration in which one of the channel members owns the channel or exerts substantial influence or control over the activates of the members along the channel. A VMS consists of manufacturers, distributor, and retailer pooling their individual strengths together to achieve operating economies or a competitive advantage. Companies like Kentucky fried chicken (KFC) have successfully streamlined production, distribution, and retailing into a single efficient system to succeed in the

Types of VMS

Corporate VMS:- many petroleum refining companies, which have company owned, company-operated retail outlets, have this type of VMS. Administered VMS:- retailers like Marks and Spencer, which have a strong hold on small suppliers, use this kind of VMS Contractual VMS:- an example of this type of VMS is seen in McDonalds, which is the channel leader for its franchises

Horizontal Marketing Systems

It is an arrangement with in a distribution channel in which two or more organization at the same channel level work towards a common goal. Horizontal arrangements have been successful in hospital supply distribution and the pharmaceutical and retiling segments. This type of arrangement generally formed at the R&D level for new product development or the at the wholesalers or retailer level for

Channel Management

Efficient channel management helps organization to reduce cost , reach potential customers , and make profits. A number of steps involved in managing the channels efficiently. First, the organization has to recruit and select the right channel members. Second , it has to focus on motivating channel members and increasing profitability. Third , it has to periodically evaluate the performance of channel members to ensure that they remain competitive in the market. Fourth, based on market changes , it

It is evaluated at both at the macro level and at micro level Channel efficiency is a channel performance dimension that judges the ability of intermediaries to undertake necessary channel function by incurring minimal cost. Channel effectiveness is another dimension that measures channel performance and considers its ability to satisfy the customer needs. It focuses on issues like lot size, delivery time, location convenience, and assortment breadth. Channel equity refers to the distribution of opportunities available to all customers in

Evaluation of channel performance

Channel conflict management

Channel conflicts can arise from either structural causes or attitudinal causes. Faulty channel design is probably the most important cause of channel conflicts. Goal divergence or goal incompatibility among channel members is another important cause. Conflicts can also arise from clashes over domains, the domain clashes may be in terms of range or products handled , coverage of territory or customer segment, and responsibilities for performing different channel function . The difference in attitudes and perceptions among channel members are another key source of channel conflicts. Unexpected changes in the competitive environment ,

Conflict Resolutions Strategies

Efficient cooperation and coordination among channel members can help prevent channel conflicts, and resolve them when they arise. The commonly used conflict resolution strategies are negotiations, and bargaining , problem solving strategies , persuasion, political strategies and co-optation.

Marketing communication control

Advertising Sales promotion Direct marketing Public relations

Marketing communication control

To market a product successfully , it is not enough to ensure that it is the right product , available at the right place at the right time; information about its availability, utility, and price must also be effectively communicated to prospective buyers. Although this may sound simple, in a competitive environment with increasing similar products and services, proliferation of media options, and complexity in segmenting audiences, it is very difficult to

Advertising

Advertising can be defined as a paid form of communication in various media used to convey information about products or services in a way that can persuade people to make a purchase. The common forms of advertisements are newspapers ads, magazine ads, television ads, radio ads, hoardings , and online ads.

Measuring advertising effectiveness

A commonly used method for measuring effectiveness of the advertisement is copy testing or message testing. (pre & post tests) The effectiveness of advertisement can also measured by monitoring the following parameters: recognition, recall, persuasion , purchase behavior

Marketing control in Branding

Brand equity and brand measurement Brand portfolio management Brand audit

Marketing control in branding

A brand is the proprietary, visual, emotional , rational , and cultural image that one associates with an organization or a product. It is always associated with a communication message, which it communicate to the consumers. It is this communication that binds the consumers in some psychological aspects to a brand , thus enhancing the brand image , brand personality

Brand equity

It denotes the value of the brand to the customer and the organization. Organization try to leverage the equity of an established brand to enter other categories of products. Brand equity not only creates a positive brand image but also drives demand because customers are often attracted towards a brand with better brand equity. Brand equity can be understood in terms of three under lying concepts, brand assets,

Brand measurement

It used to evaluate the brand equity of a brand. It helps in integrating the brand with the organizational performance. It can be conducted through different types of measurements, perception measurement , performance measurement, and financial measurement

Brand portfolio management

It includes all the brands that are managed by an organization . Generally , it is seen that less than 20% of the brands in the brand portfolio contribute to the organization profits. For example as of 1996, Nestl had a portfolio of 8,000 brands of which only 200, that is 2.5 percent of the brand portfolio, contributed to the

Brand audit

All the brands in the portfolio should be reviewed in terms of their respective market shares, their percentage contribution to the yearly sales and profits, and their positioning in the market. The brands which are not ranked high are the once that have to be removed from the portfolio through

merge, sell, milk, and kill.

Information systems for marketing control

Marketing decision support system Marketing intelligence Sales force automation

Marketing decision support system

The MDSS is a set of decision models with supporting hardware and software made available to marketing managers to assist them in analyzing relevant business data and making better marketing decisions. MDSS detects the performance of the marketing function and its various sub-functions and tracks down any

Marketing intelligence

Marketing intelligence systems help mangers monitor the performance of their sales force and assess the contribution of the marketing function to the organization's profits. It involves collecting information through human, electronic, or other means and analyzing the information with respect to both the internal and external environment.

Sales force automation

Sales force automation brings about standardization in the way the business is done. It may help in preventing the sales force from giving unwarranted and unacceptable discounts to customers. It increases the interaction between mangers and sales force It encourages the responsibility of the sales force for their actions It also helps the sales force by allowing them to voice their questions and concerns easily and to get answers faster.